Category: Debt

Once upon a time, getting a home loan was as simple as walking down to the local bank, sitting down with the manager, shaking hands, and presto! You’ve got a home loan and your local bank was your home lender. That’s pretty much the way it used to be.

Today, with the advent and popularity of online lending, times have really changed. Borrowers are now spoiled with so much info and so many choices! Right now (and how many times have you heard it over and over again in recent years) mortgage and refinancing rates are at really low numbers. With so many different lenders beating a path to your door and giving customers so much different information, how do you know when you’ve chosen a great deal from a great home lender? Well, wonder no more!

If you are reading this post, chances are that you already understand what debt is and even may be neck deep in debt right now. That might even be true for you if just a few months ago you were actually making a pretty healthy salary.

There are some good reasons you could have for being in that condition. The first one being that you may have recently lost your job because of the pandemic and that has cut off your main source of income. That just about always spells economic disaster. If you were never really any good at saving money, certainly losing your job will make your financial situation a lot worse.

Opinions are like noses: everyone has one and this one is mine. It’s official. The coronavirus has created complete chaos in our lives and the actions in Washington to combat it are literally creating a whole new “March madness” by the hour!

I try really hard to avoid putting my 2 cents (formerly 3 cents before I suffered the recent stock market losses) in this blog about politics. Occasionally it slips in, but that occurs only when I feel it’s necessary. Today, it’s necessary.

You are probably one of the millions of Americans who are concerned about the COVID-19 coronavirus and you are trying to best deal with all the news about it and the risk it imposes. We all are.

Besides the huge health risks, the world economy is dealing with the potential impact the virus is having on it. To help our economy withstand the threat from the rapidly spreading and scary coronavirus, the Federal Reserve sliced interest rates by the largest amount since 2008. While many financial experts feel that a Fed rate cut may not have any impact on what’s happening, it’s a big move that might have impact on the credit cards in your wallet, the rates you pay for a home loan or a refinanced mortgage, and many other borrowing costs, too. Whether it encourages the consumer to keep buying as they have been for the past several years during this medical crisis is another thing completely.

Chances are if you look around your house, your car, or any of your pockets, you will find a penny or three. Those little pennies really don’t get much respect in today’s world, do they? After all when you shop, if you start to dole them out at the cash register you might get some kind of dirty look like “What are you doing…just give them a damn nickel! Don’t look for the pennies!” Or after you pay with your cash you dump the two pennies you get in change into a little tip jar or charity collection (or is it?) on the counter.

Those orphan pennies are so small and insignificant, right? They seem to be more of a nuisance than anything of real value, and when you have them around you usually just ignore them. Why do you diss all these pennies?

So much is written about eliminating your debt, paying off your debt, and being totally debt free at any and every age in life that you may believe that it’s always the only goal you should have. Financial independence (FIRE) depends to a huge degree on not owing money to anyone or anything.

Truthfully, it’s a wonderful goal and for some people it actually can be achieved. It’s not common, but it does happen. When you owe debt, more than you can ever repay, it can ruin your life. But today’s post isn’t about that subject. There are many posts about it, so I want to look at debt from a different angle. What about debts you hold after you retire….your retirement debt?

Why do people wind up in big debt? You probably weren’t born into debt like was common back in the feudal age hundreds of years ago, so why does it seem so many wind in debt that way today?

These days when someone has a money problem, like when and if their car dies or they need to replace something like an air conditioning system for their home or pay off a big shopping spree that they impulsively made on their credit cards, they don’t have the money to pay for it all when the bill comes in. They really need the car fixed to get to work or the air conditioning fixed in the middle of a sweltering summer, so they end up having to purchase it on credit. Ironically sometimes that debt lasts longer than the item that they purchased! And then there is student debt, and we all have either heard about that disaster or worse, experienced it. So that raises the question, can anyone actually live a debt free life?

You know that you mean well. You always do, don’t you, when it comes to making new year’s resolutions. That diet you were gonna do to lose some weight, the smoking thing that you were definitely going to knock out last year for sure, and oh yeah, the garage that’s full of junk that you have been promising to clean out since 2007, but this is the year, right? You tell yourself every new year things like that and even more.

And of course there are those financial resolutions and goals that you seem to always set for yourself to do better with your money, but by the end of March you can’t even recall exactly what your goals were and where you went wrong along the way. Does that sound pretty familiar?

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